It can be hard for buyers to get a loan to buy off-the-plan property, even when they’re creditworthy.
Mainstream banks can get nervous about lending against deals that will only settle off into the future, by which time the lender’s credit policy or the borrower’s financial circumstances or the property market’s conditions might be very different.
CPC holds residential mortgage brokerage accreditation and has access for off the plan purchasers to over 60 lenders randing from the big 4 banks to non bank lenders.
We can give your purchasers pre approval certiainty at the time of contract deposit/exchange and provide your purchasers with updates on anticipated settlement.
Off-the-plan finance is used when a buyer wants to purchase a home before its built but settlement is generally months and sometimes years away.
Normally, when buying off the plan, the buyer will pay a deposit (e.g. 10%) when signing the contract of sale – some purchasers may not realise their borrowing capacity has reduced which creates settlement risk for a developer.
Some of CPC’s developer clients are utilising this important service we provide to ensure their buyers will have the funds to settle once the project reaches completion.
Off-the-plan finance helps developers make extra sales, by giving eager buyers, who wouldn’t otherwise qualify for finance, the ability to buy one of their new builds.
That increases the likelihood that developers will sell all their homes before construction is complete, which would:
It makes a lot of sense if your purchaser doesn’t have a residential mortgage broker to allow CPC to assist your buyers in obtaining finance.
To discuss your off-the-plan settlement finance options, book a free strategy session with David Lovato.
Phone: 0434 932 634
Email: [email protected]
How does an off the plan purchase work off the plan?
With off-the-plan purchase, the buyer agrees a price for the completed property, they exchange contracts and a deposit is paid to the developer usually held in trust via a real estate agent.
Once the development is complete, the buyers can settle the developer by taking out a standard mortgage.
What does off-the-plan financing mean?
Off-the-plan financing means getting finance to buy a future property.
At the time the loan is arranged, the property doesn’t exist, only the plans for its development.
What are the benefits of off-the-plan financing?
Off-the-plan financing benefits buyers because they can secure a property before they’ve raised all the upfront costs or lock in a price before it increases.
Off-the plan financing benefits developers because the more units they can sell upfront, the stronger their position is when they apply for finance.
Is off-the-plan finance risky?
Off-the-plan finance may be risky with an inexperienced developer. If the developer runs out of money and can’t get additional finance, the build may not be completed or completed to lower standards.
The completed dwellings may also differ from the original plans or the artist’s impressions.
When should off-the-plan settlement financing be used?
Buyers should consider off-the-plan settlement financing if they want to lock in a price or buy into a development they foresee becoming popular.
They could also consider off-the-plan settlement financing if they want to purchase an incomplete dwelling and then choose their finishing touches, like carpet colours or marble for the kitchen.
In some states there could also be stamp or transfer duty concessions.
Crowd Property Capital Pty Ltd (CPC)
A registered company under the Corporations Act 2001, ACN 600 539 544
An accredited member of the Finance Brokers Association of Australia (FBAA) Member No M-352808
A licensed Corporation under the Property, Stock and Business Act 2002, Corporation License No. 10065109.
A member of the Real Estate Institute of NSW (REINSW)
David Lovato (Sole Director) holds a Certificate IV in Finance and Mortgage Broking and Property Services (Real Estate Agents License No 201 604 57 )